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GST on Transfer of Business

04 April 2018

One of my client has carried business upto March. From 1sr April Son becomes proprietor and New GST Number is obtained. My question is what about the GST Liability on STOCK IN HAND ?? Is Father ( old proprietor ) is liable to pay GST on transfer of Stock to his SON.

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18 Replies

RAJA P M ("Do the Right Thing...!!!") (127162 Points)
Replied 04 April 2018

No need to transfer...
Only proceeds Sales...

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 04 April 2018

If father transfer it to son then no need to pay tak on it but if not then same is considered as supply & your client has to pay tax on it.

vijaykumar sindhi (proprietor) (27 Points)
Replied 04 April 2018

Means Father is liable to Pay GST on Stock

Mondira Saha (GST) (3925 Points)
Replied 04 April 2018

transfer your ITC by filling ITC -02. .. IN Proprietor case you have to cancle your gstn and take new reg. ..

vijaykumar sindhi (CA) (113 Points)
Replied 04 April 2018

New GST number is applied by Son but question is about GST Liability on Stock in hand of Father who transfer business to son.

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 04 April 2018

1. In case of transfer

As per schedule II

4. Transfer of business assets
[a] where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person;

ITs SUPPLY GST WILL ATTRACT

2ndly

if there is any balance in electronic credit ledger can tranfer by filing ITC02

As per section 18(3) cgst act
3] Where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provisions for transfer of liabilities, the said registered person shall be allowed to transfer the input tax credit which remains unutilised in his electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed.

RAJA P M ("Do the Right Thing...!!!") (127162 Points)
Replied 05 April 2018

It's in GST...
Transactions based on GSTIN not Based On Relatives....

Well reply Mr Pankaj Rawat...
I appreciate You... 🙏🙏🙏🙏🙏

1 Like

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 05 April 2018

Sorry for above reply
as when the constitution is change or business is transfer then it did not ask for any tax on such transfer, t
(today only I have tried this practically)

Steps to follow

Sir
At the the time of cancellation of firm (father) there it ask for reason for cancellation (under cancellation tab) select the option change in of constitution as soon as u select this option , below it ask u for the Gstn of transfere (son firm) input ur GSTN of Son's firm.
Enter the date from which registration is to be cancelled. next it will not ask for any stock detail to be transferred because only the constitution (PAN) is changed.
lastly OTP will send & submit
(fill all the 3 tabs for sucessful completion)
Enjoy sir without payment of any GST

Actually when there is discontinue of business then it ask for stock details & tax liability therin .

Note : Paper work , Plz prepare a transfer deed